How Building A Better Customer Experience Can Power D2C Brands To 5X Revenue Growth

One of the most exciting yet scary aspects of running a direct-to-consumer or D2C brands is that a company must directly interface with customers (both existing and potential buyers) at every touchpoint. From building brand awareness and nurturing user engagement to optimising customer acquisition and providing post-sales services, the entire funnel calls for out-of-box thinking and excellent execution. 

But more importantly, one needs to master the art of communication for meaningful interactions with the target customer base. 

Although communication is crucial throughout this journey, newly minted D2C brands or first-time entrepreneurs need not decode and analyse large data sets to figure out the secret of success.

Instead, the likes of Haptik, Yalo and Gupshup, a recent unicorn in the conversational commerce space, are helping newly minted D2C brands/first-time entrepreneurs with tech stacks and tools to ensure best-in-class customer interaction. 

But just having the tools may not be good enough without a thorough understanding of its scope and functions. To make the transition easier for young companies, Beerud Sheth, cofounder and CEO of San Francisco-headquartered Gupshup, shared his insights and experiences gained from building his messaging platform currently valued at $1.4 Bn.

He hosted a masterclass titled How Conversational Commerce Can Accelerate Your D2C Brand at Inc42’s recently concluded D2C Summit, and we bring you some valuable takeaways from the session. 

Learn How A Social Bot Can Improve Conversational Messaging For D2C Brands From Beerud Sheth, CEO And Cofounder, Gupshup:

What Lies At The Core: Quick Response, Tracking Communication Channel Preferences  

At its core, conversational commerce aims to address communication gaps that require expertise, experience and an audience-driven strategic approach. In fact, most entrepreneurs from a product background struggle to cope with these requirements. However, this digital pillar of the business building creates a level playing field for product folks and ensures that all-new D2C brands can go toe-to-toe with legacy players to capture market share. 

“The idea behind conversations is simple,” said Sheth. “A customer wants a conversation with D2C brands to be as convenient as chatting with a friend. Ideally, customers should have real-time conversations with brands on something as small as the availability of a product variant, say, a specific colour. If they get an immediate response, they may make up their mind to make a purchase. That is the power of conversation, and a brand should aim to reach that level.” 

If quick response time is a key driver of customer engagement, so is convenience. People today look for personalised dialogues via their most preferred channels even though multichannel engagement happens all the time. 

In a digital-first era ruled by smartphones and the tech infrastructure built around it, consumers mostly prefer a mobile-first approach, and they are typically heavy users of messaging apps like WhatsApp, Facebook Messenger, Instagram messaging, Telegram and the like. 

If a brand communicates with its customers on these platforms instead of usual marketing channels like email, SMS and cold calling, it will have an instant advantage of meeting customers in their comfort zone.

In contrast, multichannel engagement — getting a message on each and every channel — can be overkill, and many people find it irritating or intrusive, experts say. The outcome: They are likely to opt-out of brand communications within 6-12 months.  

What Works: Messaging-First Instead Of Application-First

Consumers often make small purchases from a variety of brands for everyday requirements. However, they may not have too many apps on their phones due to storage/memory constraints or other issues. So, unless a brand is among the top 10 in its category, people are not likely to download the app. That is why the app-first approach may not boost conversion rates.  

Elaborating on the best engagement strategy for digital storefronts, Sheth said brands should set up shop where there would be high footfall, be it ecommerce sites, apps or messaging platforms. At present, there is no footfall comparison across these channels. Nevertheless, if a messaging app allows customers to enquire and purchase without additional downloads or extra clicks (typical of a website), it should result in higher conversions. 

There is another advantage. Every conversation on a messaging app is a one-to-one interaction. This enables a brand to personalise its communication for a better customer experience and offer customised discounts, thus driving customer loyalty. 

What’s Needed: An (Automated) Personal Shopping Assistant

Building a superior customer experience through personalised dialogues and hassle-free shopping may lead to revenue growth and retention. But it requires brands to set up certain processes before they can reap the benefits. 

Sheth cautioned D2C companies about massive costs as they would require huge customer support teams for such services. Alternatively, brands can opt for automated chatbots that can learn and adapt to customer behaviour patterns so that they can converse with humans. 

How Tech Delivers Customer Insight, Builds Engagement

The tech know-how in this scenario is paramount as brands need to market themselves on messaging platforms, display product catalogues, offer payment solutions (by leveraging in-app payment gateways or integrating their custom payment options via URL/QR code) and provide customer support to answer queries and resolve complaints.  

Integrating the entire in-app experience with a messaging platform will require developing an API tech stack. But instead of developing it in-house and using up valuable resources, brands can approach third-party service providers for project evaluation and process development, said Sheth. 

According to him, there are four key offerings that a messaging app-based D2C brand must look into to create a useful and engaging customer experience. These include: 

• Live chat support: A crucial feature that may turn prospects into paying customers. Most people prefer to have a thorough understanding of the product before making a purchase. So, real-time conversations with customers for answering their queries are bound to make a difference for a brand.
• Personalised deals: As every one-to-one interaction elicits a customer’s expectations from a brand, companies need not spam them with offers that rarely resonate. With a data-driven approach, brands can easily understand each customer’s interests and create specific deals to drive their buying decisions. Again, staying off spammy marketing practices helps build trust and boosts conversion. 
• Product discovery: Helping customers find the most relevant products based on their queries and recommending similar items without overwhelming them with information overload are key to building value. 
• Incentivising sharing and referrals: Enabling a one-click option to share a product and incentivising it with a reward can quickly start a word-of-mouth promotion, given the high footfall in messaging apps. 

The Bottom Line

According to various market studies, these customer communication tools and strategies hold considerable weight and get maximum returns in terms of customer outreach and engagement. 

Market research by Forrester found that brands with superior customer experience bring in 5.7 times more revenue than those lacking in specialised customer experience. 

Another study by Microsoft titled State of Global Customer Service Report revealed that 96% of respondents believe that customer service is important in their choice of loyalty to a brand.

The scope of conversational commerce is immense as D2C brands look for alternative and unclogged routes to reach customers and build a strong communication channel to accelerate their growth.

“In the end, I believe the businesses that truly succeed are good at building relationships and not just products,” concluded Sheth.

Catch all the riveting sessions where leading names from the D2C ecosystem, including the founders of SUGAR, boAt, FirstCry, Lenskart and Gupshup, and investors from L Catterton, Saama Capital, GSF Accelerator and more provided valuable takeaways. You can find it all at the D2C Academy!

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